Washington, D.C.—Countries around
the world are embracing “payments for ecosystem services” (PES) as a
verifiable approach to protecting biological diversity and mitigating climate
change, according to research conducted by the Worldwatch Institute for
the publication Vital
Signs Online. PES are financial
arrangements designed to protect the many benefits that are provided by
the natural environment. They include payments for projects that invest
in biodiversity and watershed protection, ecosystem restoration, and carbon
capture in forests.
“Nearly 60 percent of all ecosystem services are being degraded or used
in an unsustainable manner,” said Alexander Ochs, Director of Climate
and Energy at Worldwatch. “With PES, we can put a monetary value on these
important services, from water filtration to carbon sequestration, to ensure
that they are being properly sustained for the benefit of both people and
the planet.” PES schemes aim to encourage a net increase in benefits that
would not otherwise have occurred without the financial incentive, a concept
known as providing “additionality.”
At the international level, two initiatives—the United Nations’ Reducing
Emissions from Deforestation and Forest Degradation (REDD) Programme and
the World Bank Forest Carbon Partnership Facility—were established in
2008 to assist in the development of a global PES scheme that would compensate
developing countries for their efforts to conserve tropical forests, which
act as important carbon “sinks.” The international community has discussed
scaling up REDD finance to $30 billion per year. Several wealthier governments,
including Norway and Germany, are providing funds to help developing countries
build the capacity to handle a REDD market as well as to provide financial
incentives to the best performers.
In the absence of a fully defined REDD marketplace, the primary markets
for ecosystem services are currently in the areas of watershed and biodiversity
protection, with a combined global value of at least $11 billion in 2008.
The largest national markets for services to protect and enhance water
quality are China and the United States, respectively.
Worldwide, payments for biodiversity totaled $2.4 billion to $4 billion
in 2010. Although PES growth has slowed in countries that already have
programs in place for biodiversity protection, other countries are adopting
new programs and policy frameworks for biodiversity payment mechanisms.
“In 2010, at least 45 payment programs for biodiversity were operational
across the world and 27 programs were in development,” said Will Bierbower,
the author of the article and a former Climate and Energy researcher at
Worldwatch.
Factors driving the development of PES schemes include the scale of the
ecosystem service being provided, the number of buyers and sellers involved,
and the degree to which there is an immediate financial payoff. The design
of a PES arrangement is shaped in part by the prevailing political, cultural,
and institutional arrangements in a country or region; however, governments
have typically been the key players in establishing most PES arrangements.
“China’s Sloping Land Conversion Program is a good example of a government-backed
PES scheme that was enacted in tandem with regulations,” said Bierbower.
“In 1999, the government started paying farmers to restore land to its
original ecological state, following decades of mismanagement that had
led to topsoil erosion and downstream flooding. In the first seven years,
rural farmers received some $7.7 billion in payments and enrolled some
7.2 billion hectares of cropland in what has become one of the largest
PES schemes in the world.”
Further highlights from the article:
To obtain a free copy of this article please contact Supriya Kumar at sku...@worldwatch.org.
About the Worldwatch Institute: Worldwatch is an independent research organization based in Washington, D.C. that works on energy, resource, and environmental issues. The Institute’s State of the World report is published annually in more than 20 languages. For more information, visit www.worldwatch.org.
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